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Non-Tech : EARNINGS REPORTING - surprises, misses & more -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (544)	4/12/2001 6:31:28 AM
From: 2MAR$	Read Replies (1) \| Respond to of 762

CREE ( $15 up $18) Cree's Earnings Bright Cree saw a big rise in revenue and earnings for the third quarter, and it met estimates that it had not lowered, though it has adjusted downward its estimates for next quarter and 2002. It also announced plans to replace its CEO. Trading at 27 times adjusted earnings and recently expanding its stock buyback program, Cree looks like a healthy company with a good outlook for the future. Email this page Format for printing Become a Fool! Receive via Handheld Related Links Cree Delivers What Others Can't Cree Edges Estimates Discussion Boards Cree By Brian Lund (TMF Tardior) April 11, 2001 Semiconductor company Cree, Inc. (Nasdaq: CREE) reported its third-quarter earnings after the bell today. The Durham, North Carolina company had revenue of $53 million, up 29% sequentially and 81% year-over year. Earnings per share (EPS) reached $0.18 before amortization and one-time charges, a 53% increase over last year. Cree also announced the promotion of president and chief operating officer Chuck Swoboda to the position of chief executive officer, effective June 25, 2001. He will replace current CEO Neal Hunter, who will remain chairman. Here's the big news: Cree's numbers were in line with expectations, and those expectations had not been lowered in the preceding three months. Well, that's not the whole story. Cree held up longer than most semiconductor stocks, but it has not remained immune to the slowdown. The company issued a warning last month, but it kept third-quarter revenue and earnings expectations intact. It lowered estimates for the fourth quarter by 10-15% to around $45 million in revenue and $0.15 EPS. Cree didn't discuss the outlook for the fourth quarter in its press release today, but it did reaffirm its lowered guidance for 2002. It expects to bring in $200 million to $240 million in revenue and experience a 0-20% increase in profit. Cree jumped to $18 per share after its earnings were announced, a 30% rise for the day. It also received a bump, along with other semiconductors, from a Salomon Smith Barney report that called the market bottom and said a turnaround was "only months away." With today's rise, Cree is valued at about 27 times anticipated 2001 earnings before goodwill and one-time charges. If it hits the middle of its estimates for 2002, it is currently 24.4 times next year's earnings. Cree recently expanded its stock buyback plan, adding an additional three million shares to the current four million share commitment. It's not a bad time for the company to buy back more shares, as the stock is near its 52-week low. Many semiconductor stocks can say the same, but Cree has taken a beating worse than most. Its market capitalization has shrunk by $5.3 billion, or 80%, from its high, compared to a 50% drop in Linear Technologies (Nasdaq: LLTC) and a 60% decline in Applied Materials (Nasdaq: AMAT). That's to be expected, since Cree's revenue stream is more suspect than most semiconductor companies. Cree is the world's leading manufacturer of silicon carbide (SiC), which is used in low-power light emitting diodes, wafers and faux gemstones. Cree is also developing a blue laser product, which could substantially increase the capacity of CDs and DVDs. It's impressive to see Cree doing well in a tough environment. For a young company with intriguing long-term prospects, it even trades at an understandable multiple. With $250 million in cash equivalents and no debt, it looks like Cree is a healthy company with a good outlook. Brian Lund owns no stocks mentioned in this story. The Motley Fool is investors writing for investors.